The municipal market was unchanged to slightly weaker yesterday as the week’s largest scheduled transactions came to market.

“There’s definitely a bit of weakness out there, more so in the intermediate part of the curve,” a trader in New York said. “You could call it unchanged in spots, maybe a basis point or two cheaper in others. There’s some decent activity out there, though.”

“We’re probably closer to unchanged when the smoke clears, but there’s a weaker tone,” a trader in Los Angeles said. “I think I’d call it flat on the whole, but the tone is weaker, and we could be down a basis point or so depending on where and what you’re trading.”

In the new-issue market yesterday, JPMorgan priced a $3.466 billion taxable general obligation sale for Illinois.

The deal is broken into five pieces, each with a principal of $693.2 million. One piece will expire Jan. 1 of each year from 2011 through 2015. Yields range from 1.823% in 2011 to 4.421% in 2015.

The bonds were priced to yield between 135 and 182 basis points over the comparable Treasury yields. The bonds are callable with a make-whole provision.

Moody’s Investors Service rates the credit A2 after downgrading it last month. Fitch Ratings assigned an A rating to the state’s offering, while placing Illinois’ $19.4 billion of GO debt on negative watch. Standard & Poor’s downgraded Illinois to A-plus last month.

Barclays Capital priced $858.7 million of transportation system bonds for the New Jersey Transportation Trust Fund Authority in two series, including $500 million of taxable Build America Bonds.

The Series B BABs mature in 2040, yielding 6.561% priced at par, or 4.26% after the 35% federal subsidy.

The bonds were priced to yield 206 basis points over the comparable Treasury yield, and are subject to a make-whole call at Treasuries plus 30 basis points.

Bonds from the $358.7 million of Series A capital appreciation bonds mature from 2025 through 2040, with yields to maturity ranging from 5.85% in 2025 to 6.25% in 2040.

The credit is rated A1 by Moody’s, AA-minus by Standard & Poor’s, and A-plus by Fitch.

The Treasury market showed some losses yesterday. The yield on the benchmark 10-year note opened at 3.82% and was quoted near the end of the session at 3.83%.

The yield on the two-year note opened at 0.99% and was quoted near the end of the session at 1.03%. The yield on the 30-year bond finished at 4.69% after opening at 4.68%.

Yesterday’s Municipal Market Data triple-A scale yielded 3.05% in 10 years and 3.76% in 20 years, compared to levels of 3.04% and 3.75% on Wednesday. The scale yielded 4.13% in 30 years yesterday, compared to Wednesday’s level of 4.12%.

As of Wednesday’s close, the triple-A muni scale in 10 years was at 79.4% of comparable Treasuriesand  30-year munis were 87.8% of comparable Treasuries, according to MMD, while 30-year tax-exempt triple-A GOs were at 91.8% of the comparable London Interbank Offered Rate.

Elsewhere in the new-issue market yesterday, Seattle competitively sold $190.8 million of taxable and tax-exempt revenue bonds in two series, including $109.1 million of taxable BABs.

The BABs were sold to Citi at a true interest cost of 3.72%. The bonds mature from 2020 through 2030, with term bonds in 2033 and 2040.

Yields range from 5.37% priced at par in 2026, or 3.49% after the 35% federal subsidy, to 5.62% priced at par in 2030, or 3.65% after the subsidy. Bonds maturing from 2020 through 2025 and in 2033 and 2040 were not formally re-offered.

The $81.8 million tax-exempt series was sold to Robert W. Baird & Co. with a TIC of 3.31%. The bonds mature from 2010 through 2027, with coupons ranging from 3% to 5%.

None of the bonds were formally re-offered. The bonds are callable at par in 2020.

The credit is rated Aa2 by Moody’s and AA-plus by Standard & Poor’s.

Bank of America Merrill Lynch priced $175.3 million of Florida Forever revenue bonds for the Florida Department of Environmental Protection in two series.

Bonds from the $87.4 million Series A mature from 2010 through 2017, with a term bond in 2025. Yields range from 0.90% with a 2% coupon in 2011 to 4.40% with a 4.25% coupon in 2025. Bonds maturing in 2010 were decided via sealed bid. The bonds are callable at par in 2019.

Bonds from the $87.9 million Series C mature from 2010 through 2013, yielding 0.90% with a 4% coupon in 2010, 1.40% with a 4% coupon in 2011, and 1.84% with a 5% coupon in 2013. Bonds maturing in 2010 were decided via sealed bid. The bonds are not callable.

The credit is rated A1 by Moody’s, AA-minus by Standard & Poor’s, and A-minus by Fitch.

In economic data released yesterday, initial jobless claims were essentially unchanged for the week ending Jan. 2, increasing by only 1,000 to 434,000, as continuing claims fell.

Continuing claims dropped by 179,000 to 4.802 million for the week ending Dec. 26, the lowest level since Jan. 31, 2009.

Economists polled by Thomson Reuters expected 447,000 initial claims and 4.980 million continuing claims.

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